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N Chandrasekaran is set to continue as chairman of Tata Sons after the company's board approved a fresh five-year term, marking a dramatic reversal just weeks after he announced that he would step down in February 2027.
Chandrasekaran informed the board on August 12 that he would not offer himself for reappointment when his existing term expires on February 20, 2027. The decision followed months of discussions over his third term, with the board unable to reach unanimity.
On September 3, the company's Nomination and Remuneration Committee asked Chandrasekaran to reconsider his decision and recommended that he be reappointed. At the September 17 board meeting, he agreed to reconsider and the board subsequently approved another five-year term by a 4-1 vote. Noel Tata, chairman of Tata Trusts and a Trusts nominee director, was the only director to vote against the proposal.
The decision, however, has opened a new governance dispute at the Tata Group. Tata Trusts, which holds about 66% of Tata Sons, has rejected the board's decision and described the resolution as a "legal nullity". The Trusts argues that Tata Sons' Articles of Association require the necessary support from its nominee directors for the appointment or reappointment of a chairman.
Tata Trusts also maintains that Chandrasekaran's August decision not to seek another term had already been accepted and that the succession process should have begun. Noel Tata reportedly submitted a legal opinion from former Chief Justice of India DY Chandrachud supporting the Trusts' position.
The leadership dispute comes alongside another major issue for Tata Sons: its regulatory status and potential stock-market listing. The company said its board has decided to begin steps to comply with applicable Reserve Bank of India guidelines after the RBI rejected its request to surrender its registration. Tata Trusts, however, has opposed moving toward a listing and has sought further time and clarification from the central bank.
Chandrasekaran's reappointment still requires the relevant shareholder approval. Meanwhile, Tata Trusts says it intends to continue pursuing the appointment of a successor, leaving the leadership question at Tata Sons unresolved despite the board's latest vote.
The developments mark a significant disagreement between Tata Sons' board and its principal shareholder, Tata Trusts, over leadership, governance and the future structure of the group's holding company.
